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Today’s market overview

Equities have regained some poise this morning on hopes that the two sides of the political divide in American might be edging closer to agreeing a deal on the budget and debt ceiling.

IC TIP UPDATES:

WH Smith (SMWH) has returned solid results for the year to August with total group profits up by 6 per cent despite a dip in revenues of 5 per cent on a like for like basis. Management is targeting a further £22m in cost savings in the next three years and has also announced a further £50m buy back programme today. The final dividend is increased by 15 per cent to 21.3p, making a full year dividend of 30.7p. Buy.

Gulf Keystone Petroleum (GKP) has recommenced commercial production from its Shaikan field in Kurdistan. We keep our buy rating.

Simon Thompson recommendation. Air Partner (AIP) is benefiting from strong operational performance which helped it to post a 31 per cent rise in underlying pre-tax profits to £4.2m despite a 3 per cent decline in revenues. The company has also upped its dividend by 10 per cent to 20.05p. The company enjoyed a particularly strong performance in its private jets business where revenues rose 22 per cent and profits grew by 47 per cent.

Emeralds specialist Gemfields (GEM) enjoyed a good auction at Jaipur in the last week of September when it sold $8.5m worth of stones at an average price of $58 per carat, the highest achieved at any Gemfields auction. We retain our buy recommendation.

Industrial tapes business Scapa (SCPA) continues to trade well and management expects full year performance to meet current expectations. Buy.

A trading update from Simon Thompson recommendation. Greenko (GKO) reported that the Indian renewable energy developer has increased its capacity from 309MW to 412MW since the beginning of April and is on track to add 250MW in the year to March 2015. The company reports that in some areas of India it is now producing energy at lower cost than conventional producers.

KEY STORIES:

BAE Systems (BA.) says recent trading has been in line with management’s expectations and that double digit earnings per share growth is still expected for 2013, aided by buy backs. But the company did warn that, should negotiations with Saudi Arabia over the pricing of the Salam deal drag on into next year earnings per share could take a hit of 6p-7p.

Melrose Industries (MRO) continues with its strategy of buying, improving and selling off assets with the proposed sale of Crosby and Acco to private equity giant Kohlberg Kravis Roberts & Co in a deal worth $1.01bn, subject to clearance from competition authorities in various jurisdictions including the US. Some of the proceeds will be earmarked for a return of cash to shareholders.

Recruiter Hays (HAS) has enjoyed a strong rebound in business in the UK, where net fee income rose by 8 per cent in the three months to 30 September, and Europe and the rest of the world, where fees rose 13 per cent, but suffered a 20 per cent reversal in Asia Pacific where its Australian operations were hit hard.

OTHER COMPANY NEWS:

Immunodiagnostic Holdings (IDH) expects to report half year revenues of £27m, up 13 per cent on last year and says the full year should also show ‘modest’ growth.

Anglo Asian Mining (AAZ) reports record gold production in the third quarter from its Gedabek mine in Azerbaijan. A new leaching plant has improved gold production, with 20,242 ounces produced in the past three months, taking year to date gold production to 37,700 ounces and leaving it on track to hit 60,000 ounces for the full year.

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